April 2, 2026

Global markets followed a familiar pattern of rallying to start the week on hopes of an end to the Iran War, only to struggle ahead of the weekend. However, the early surge during the period was enough to snap a five-week losing streak for the major averages. An oversold bounce on Monday left the major averages mixed after oil prices nudged higher as Iran said it could pass a bill to levy tolls on tankers passing through the Strait of Hormuz. A report that China and Pakistan were negotiating a cease-fire and possible end to the Iran war sent global markets soaring on Tuesday led by strength in the Technology (XLK) sector. The Philadelphia Semiconductor Index surged +6.24% led by a +12.83% jump in shares of Marvell Technology (MRVL) after Nvidia (NVDA) announced a new partnership and $2 billion investment in the company. The major averages nudged higher again on Wednesday as oil prices eased ahead of an evening speech by President Trump on the war. Better than expected jobs data from ADP and February Retail Sales helped lift equities in cautious trading. It was the first three-day win streak for the DJIA going back to the last week in February. An opening tumble in global markets on surging oil prices after Trump's speech was bought on Thursday bringing the major averages back to finish mixed on hopes of diplomatic efforts to reopen the Strait of Hormuz. Investors shook off a +11% spike in crude oil prices after the President commented that the Iran war could extend several more weeks. The DJIA erased a 668-point (-1.4%) drop and the NASDAQ a 470-point (-2.1%) selloff to trade in the plus column shortly after the open, finishing mixed. Despite oil moving higher the Energy (XLE) sector was the weakest market group during the period, down -3.69%, with Consumer Discretionary (XLY) also lower. Nine of the 11 sectors were able to post positive led by 2%+ gains in REITs (XLRE), Materials (XLB), Communication Services (XLC) Utilities (XLU) and Technology (XLK). The different indexes finished the short week with their best gains since November as investors look ahead to Friday's BLS jobs report and key inflation data next week. However, war headlines and movement in oil prices will dominate market activity as the major averages look to extend their gains and clear key resistance levels.

For the period, the DJIA gained 1338.03 points (+3.0%) and settled at 46504.67. The S&P 500 tacked on 213.84 points (+3.4%) and closed at 6582.69. The NASDAQ jumped 930.82 points (+4.4%) finishing at 21,879.18. The small cap Russell 2000 rose 80.34 points (+3.3%) and settled at 2530.04.

Market Outlook: The technical condition of the market improved this week but is mixed as the major averages were able to snap their five-week losing streak and close the period with solid gains. Despite the positive week the DJIA, S&P 500 and NASDAQ remain below their respective 200-day MA. While the Dow's rally stalled as it hit the 200-day MA, the S&P 500 and NASDAQ never challenged that key MA resistance level. In addition, the S&P 500 continues to struggle at the 6600 mark. The S&P 500, NASDAQ and small cap Russell 2000 managed to retrace 38.2% of the February-March selloff which if they can trade above that level will open the door for a run to their 50% Fibonacci retracement level. If a stock or index can quickly retrace 50% of a steep selloff it often goes on to retrace the whole move. The technical indicators improved with MACD, a short-term trend gauge, now bullish, while Momentum, as measured by the 14-day RSI, neutral but improving across the board. There are some positive signs to point out however, with the DJ Transportation Index, small cap Russell 2000 and Philadelphia Semiconductor Index (SOX) showing positive divergence and finishing higher for a second week. Market technicians like to see these secondary indexes lead the market higher and lower and all three of these indexes are positive for the year. The Russell 2000 has retraced 38.2% of the selloff but stalled at its 100-day MA. The Philadelphia Semiconductor Index crossed above its 100-day MA this week and has retraced 50% of its drop. The DJ Transportation Index is trading above its 50-day MA and retraced 61.8% of its decline. A break above these key resistance areas is likely to bring more buying into the broader market. Finally, after climbing higher the last few weeks into the 30's, the VIX is showing signs that traders believe the worst is behind us as the VIX closed at 23.87. While some traders and technicians look for a capitulation to the downside that could signal a reversal in the selloff, it doesn't have to happen. A move above key resistance and trend lines could accomplish the same thing on positive underlying breadth. However, recent market volatility has been triggered by headlines in the Iran war and surging oil prices and as Thursday's action showed, that's likely to continue over the near-term requiring a cautious approach to adding exposure to equities until some of these resistance hurdles are cleared.

A chart of these indicators can be found by going to the Market Edge Home page and clicking on Market Recap, which is on the right-hand side of the page just below the Second Opinion Status numbers.

Cyclical Trend Index (CTI): The underlying premise of the CTI is that the market, as measured by the Dow Jones Industrial Average (DJIA), tends to move in cycles that often resemble sine waves. There are five identifiable cycles, each with different time durations at work in the market at all times.

Currently, the CTI is Negative at -6, unchanged from the previous week. Cycle C is bullish, while Cycles A, B, D and E are bearish. The negative CTI should reset to a bullish configuration next week with a probable bottom in the market having taken place on Monday's early drop providing the DJIA doesn't trade below 45057.28. However, the longer cycles are negative and that could imply further weakness later in the year.

Momentum Index (MI): The markets momentum is measured by comparing the strength or weakness of several broad market indexes to the DJIA. Readings of -4 and lower are regarded as bearish since it is an indication that a majority of the broader based market indexes are weaker than the DJIA on a percentage basis. Conversely, readings of +4 or higher are regarded as bullish.

The Momentum Index is Neutral at +2, up two notches from the previous week. Breadth was mixed at the NYSE as the Advance/Decline line added 2816 units while the number of new 52-week lows exceeded the number of new highs on all four sessions. Breadth was also mixed at the NASDAQ as the A/D line gained 4360 units while the number of new lows out did the new highs on each day. Finally, the percentage of stocks above their 50-day moving average rose to 25.3% vs. 21.4% the previous week, while those above their 200-day moving average increased to 46.0% vs. 42.3% prior. Readings above 70.0% denote an overbought condition, while below 20% is bullish.

Underlying market breadth was mixed with the NYSE and NASDAQ Advance/Decline Lines, leading indicators of market direction, moving higher. New 52-week lows continue to dominate new highs with the NASDAQ recording more new 52-lows than highs for a fifth consecutive week however the number of new lows did contract during the week.

Sentiment Index (SI): Measuring the market's Bullish or Bearish sentiment is important when attempting to determine the market's future direction. Market Edge tracks thirteen technical indicators listed below that measure excessive bullish or bearish sentiment conditions prevalent in the market. The Sentiment Index is Neutral at +3, unchanged from the previous week.

Investor sentiment showed little change for the week and is regarded as Neutral. The American Association of Individual Investors (AAII) shows an increase in retail bears to 51.4% and above the historical average of 31.0% for an eighth consecutive week, but retail bulls were also on the rise coming in at 33.6%. The National Association of Active Investment Managers (NAAIM) Exposure Index showed money managers sitting on their hands this week with exposure at 68.4% from 68.5% the prior week. That's the lowest exposure to equities for money managers since the first week of May 2025. The Percentage of Bullish Investment Advisors fell to a bullish 35.2%, while the Percentage of Bearish Investment Advisors rose to 31.5% from 25.0%, the most since May 2025.

Market Posture: Based on the status of the Market Edge, market timing models, the 'Market Posture' is Neutral as of the week ending 04/03/2026 (DJIA - 46504.67). For a closer look at the technical indicators and studies that make up the market timing models, check out the tables located below.

Industry Group Rankings: What's Hot (13) - What's Not (17): The following are the strongest and weakest Industry Groups for the period ending 4/01/26. Strongest: Agricultural, Integrated Oil & Gas, Energy and Chemicals. Weakest: Paper & Forest Products, Technology Services, Building Materials and Financial Services. To review all the Industry Group rankings in the Market Edge universe, click on the Industry Group tab.

ETF Center: The top performing ETF categories for the week ending 4/01/26 were: Commodity-Precious Metals (+6.83%), Commodity-Energy (+5.21%), Sector-Basic Materials (+4.68%), Commodity-Blend (+3.65%) and Commodity-Base Metals (+3.20%). The weakest categories were: Specialty Technology (-3.21%), Growth-Mid Cap (-1.81%), Sector-Internet (-1.13%), Growth-Large Cap (-1.06%) and Sector-Telecom (-1.03%). To review all the ETF categories in the Market Edge universe, click on the ETF Center tab.

By David L. Blake, CMT